US cellular market has nearly reached saturation point

In our opinion there is little need to do that as yet. AT&T and Verizon still have a few subscriptions to mop up for a few years yet, after which the US market will be saturated. It is generally accepted that a cellular market is not saturated when 100 per cent of its citizens have a mobile phone, but when each citizen has between 1.2 and 1.3 phones. In the US there are just over 327 million phones, in a population approaching 318 million, which means there are another 66 million phone contracts to sell in the US. However once a country gets over 100 per cent, progress slows, which we are now witnessing in the US.

If Sprint-T-Mobile HAS to partner with someone, its new Softbank owners will want to know which partner it will need. On the one hand with cable companies, it has great Wi-Fi coverage for offload, while on the other, Cable doesn’t want an open MVNO, but one where Wi-Fi is the first option, and LTE just fills in the ever decreasing gaps. In that instance Sprint-T-Mobile gets very little of the subscription revenue.

If it was to partner Dish to give it a return path, it could have a far deeper relationship. In the past cable would have said to Sprint-T-Mobile that it was a closer partnership and it would have to be exclusive. In this future scenario, we can’t see how cable can say this. The company it will be dealing with is being asked for far less, and offered far less, and yet that company is suddenly much larger.

Instead the merged entity would likely sweep up any wholesale deals going and Cable cannot come along and say “We would deal a deal with you, but not if you are planning to do one with Dish,” which has prevented it in the past.

But if Sprint-T-Mobile is faced with having to find content partners as well, given its weak video offerings in the past, it is better off going to a more sheepish, and disadvantaged Dish and leverage everything it can. In fact a merger would make more sense, because then it could have even more spectrum (it doesn’t need it) and full control of the content business. Given Dish is controlled by one man, we cannot see this deal being an easy one, and Charlie Ergen is likely to perhaps be his own worst enemy and be unable to swallow the right terms.

Obviously if Sprint-T-Mobile cosies up too close to Dish or merges with it, it might no longer be attractive to cable companies as a partner.

You have to go back to 2007 when the rumour that AT&T would buy DirecTV first emerged, almost before John Malone had got his hands on control of it. About the same time, Clearwire was thought to be destined to partner Dish and possibly DirecTV as well, providing them both with full broadband capacity. At the time, Cable came along and cut a deal with Sprint for a joint venture called Pivot, and Sprint in turn took control at Clearwire and none of those other deals could happen. Later the Sprint-Cable relationship also foundered. So we are still waiting for this cluster of deals to be done some seven years on.

It’s a bit like World War I, when everyone knew who their friends were and who they didn’t like, and something like someone blowing up Austrian Archduke Franz Duke Ferdinand was bound to start a war.

In all of this there is one potential king who is likely to emerge here at some point, and that’s John Malone. It was he who built up TCI Communications, which he then sold to AT&T. Just two years later, it was sold to Comcast to create the biggest US gorilla on the cable block. Now he seems to be cashing out once again, taking 49 per cent of the payment that AT&T will pay for DirecTV, some $24bn, which he can now re-invest in making "the right kind of deal" happen.

Already he is thought of as the king of content through his Liberty Media holdings, and he controls the second largest cable company in the world in Liberty Global. Most of its operations are in Europe, but it might wish to join in on a US Malone adventure.

The Liberty kingpin is universally known as Darth Vader – he got the nickname from Al Gore – because of his blunt negotiation skills when he tried to defeat the must-carry rules for cable. He is 73 and you’d think that he has enough money, but it is characters like him who have the audacity to think the unthinkable.

If you had to pick out an audacious plan, Malone might buy the spectrum from Dish for a premium, use it to leverage a deal at Sprint-T-Mobile, and use his partial ownership at Charter and the money from DirecTV to round up a few more cable companies to add to SpinCo, which he would acquire too, and then parley all of that into a fixed Wi-Fi network which roams for free with the Comcast TWC Wi-Fi – to support Sprint-T-Mobile. Why not throw in the idea of buying Netflix, or, better still, Hulu, to take the whole plan OTT.

Throughout this, all the usual suspects run - Google Apple, Microsoft, Facebook - but the only one that has shown that it has tendencies to want to own networks is Google. And Google universally wants its technology to make a difference and it would never want to inherit the kind of service culture that bedevils AT&T, or a cable company.

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